On Thursday (Aug. 1), Snap, the parent company of Snapchat, announced it reached a milestone during the second quarter: 850 million monthly active users.
“Our community grew to reach more than 850 million monthly active users in Q2, with more than 11 million Snapchat+ subscribers,” Snap CEO Evan Spiegel said, as the company continues its journey toward a target of 1 billion monthly users.
Daily active users (DAUs) rose 10% during the quarter, to 432 million. New features like editable chats, Map emoji reactions and My AI reminders were introduced to enhance user communication. Content engagement surged, marked by a 12% increase in global viewers and a 25% rise in time spent watching.
Snapchat+, a major growth driver, hit 11 million subscribers in the second quarter.
Snap’s strategy to drive DAU growth and engagement is focused on improving the way Snapchatters communicate and interact with their friends, family and the world, Spiegel noted in the shareholder letter.
“We have delivered a number of new communication features and user experience enhancements in recent months to execute on this strategic initiative,” he said. “These improvements have contributed to all-time highs in the number of daily active users sending Snaps in every region, which is an important input to sustained daily engagement.”
Meanwhile, revenue climbed 16% year-over-year to $1.24 billion, driven by a 16% increase in Direct Response (DR) advertising revenue, with the total active advertisers more than doubling year-over-year. Brand advertising revenue, however, slipped 1% due to reduced demand in some sectors.
“Our focus on visual communication between friends and family is a strategic advantage that has enabled us to serve more than 75% of 13- to 34-year-olds in over 25 countries,” Spiegel noted in the letter. “We are pleased with the ongoing progress made in our DR business as well as the continued rapid growth in the total number of active advertisers, which more than doubled year over year in Q2.”
Snap renewed key sports partnerships with the NFL, NBA and WNBA, and launched Snap Nation with Live Nation, offering exclusive tour and festival access. A collaboration with Ensemble, led by Issa Rae, aims to elevate diverse voices through the 523 creator accelerator program. The company also formed its first Council for Digital Well-Being to gather teen perspectives on digital life and introduced new safety features, including expanded in-app warnings and enhanced friending protections.
Chief Financial Officer Derek Anderson highlighted the company’s performance in DR advertising, noting the strong results from the 7-0 Pixel purchase optimizations, particularly with App Install and app purchases.
“Early results from value optimization and a 300% year-over-year increase in Conversions API (CAPI) adoption further boost performance,” Anderson stated in the letter. “This solid DR performance is reflected in a significant rise in active advertisers, which more than doubled year-over-year in Q2.”
Key factors include enhancements in Snap Promote, automated campaign setup tools and refined go-to-market operations, which together contribute to steady growth and resilience in the DR sector, Anderson noted.
In contrast, Anderson explained, “the brand advertising side has faced volatility, a trend exacerbated by a challenging economic environment. However, Snap’s focus on performance-based DR advertising proves advantageous in such times, particularly in sectors like restaurants, which continue to see growth due to effective DR strategies.
Meanwhile, Spiegel pointed to augmented reality because it “continues to inspire communication, and Snapchatters play with AR [augmented reality] Lenses billions of times per day on average.”
In the second quarter, the number of Snapchatters sharing AR Lens experiences with their friends increased 12% year-over-year, driven by the popularity of generative artificial intelligence lenses and improved ranking and optimization of their AR experiences.
“For example, our ML Scribble World Lens, which enables Snapchatters to transform into artistic, cartoon-style versions of themselves, was viewed over 1 billion times in Q2, and our 90s AI Lens was viewed by more than 20% of US Snapchatters,” Spiegel said.
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